Selling on Vinted or eBay? Stop! When You Must Pay Tax on Your Side Hustle

Selling on Vinted or eBay? Stop!

You have probably seen the scary headlines: "HMRC is cracking down on Vinted sellers!" or "New Side Hustle Tax introduced!"

If you regularly sell clothes on Depop, vintage items on eBay, or crafts on Etsy, you might be panicking in 2026. Will the taxman demand a cut of your small profits? Do you need to hire an accountant just to sell your old jumpers?

Before you close your shop, take a deep breath. Most casual sellers won't pay a penny. But you need to understand the strict rules of the "Trading Allowance."

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The Rules: Is HMRC Spying on You?

Since January 2024, digital platforms like Vinted, eBay, Depop, and Airbnb are legally required to report seller data to HMRC. As of 2026, this data sharing is fully active.

Platforms will send your details to the taxman if:

• You sell more than 30 items a year, OR
• Your total sales exceed €2,000 (approx £1,700).

However, reporting does not mean taxing. Just because HMRC knows you sold items, it doesn't automatically mean you owe tax. It depends on what you are selling.

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The Magic Number: £1,000 Trading Allowance

The UK government encourages small side hustles. That is why we have the Trading Allowance.

The Rule: You can earn up to £1,000 of GROSS income (total sales revenue, not just profit) in a tax year from self-employment or casual services completely tax-free.

• Earned £800? No need to tell HMRC. Keep the money.
• Earned £1,500? You must register for Self Assessment and declare the income.

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Crucial Distinction: "Selling Clutter" vs. "Trading"

This is where most people get confused. Tax depends on your intent (Badges of Trade).

✅ Scenario A: Selling Personal Items (No Income Tax)

You clear out your wardrobe and sell your old coat on Vinted for £50. You bought it years ago for £100.

Verdict: You are selling personal possessions (chattels) at a loss. This is NOT trading. Even if you sell £5,000 worth of your own old stuff, you usually don't owe Income Tax.

Exception: If you sell a single valuable item (like a painting or jewellery) for more than £6,000, you may need to pay Capital Gains Tax (CGT).

❌ Scenario B: Trading for Profit (Taxable)

You go to charity shops/car boot sales, buy shirts for £5, and resell them on eBay for £30.

Verdict: You are buying with the intention to sell at a profit. This is "Trading." If your total sales exceed £1,000 in a tax year, you MUST declare it.

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What Should You Do?

If you are just a casual seller clearing out your attic, relax. The rules don't target you.

But if you are running a mini-business:

1. Keep Records: Track every sale and expense.
2. Know the Tax Year: The UK tax year runs from April 6th to April 5th.
3. Check the £1,000 Limit: If your revenue crosses this threshold, register for Self Assessment by October 5th following the tax year end.

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Don't Fear the 'Vinted Tax'

The "Vinted Tax" panic is mostly exaggerated. The Trading Allowance protects the vast majority of casual sellers.

However, HMRC now has the data to spot the difference between a "spring cleaner" and a "trader." If your side hustle is a business, treat it like one. Paying tax means you are making a profit—and that is a good problem to have!

Disclaimer: This article is for informational purposes only and does not constitute financial or tax advice. UK Tax laws (HMRC) are subject to change. Thresholds mentioned are correct as of Jan 2026. Please consult a qualified Accountant if you are unsure about your tax status.